Industry Trend Analysis - Lira Boost For Gas Demand - OCT 2017


BMI View: Gas demand in Turkey over H1 has been strong, supported by a stronger Lira and discounted Iranian imports. Over the long term, whilst gas demand from the power sector will diminish, strong consumption growth in the residential and industrial sectors will ensure positive demand growth.

A stronger Lira and cheaper Iranian imports have supported Turkish gas demand over H1 2017, which recorded 16% growth y-o-y from the corresponding time period in 2016. Whilst previously we expected positive growth in Turkish gas consumption over 2017, as a gradual recovery in economic fundamentals boosted residential and industrial demand, we have adjusted our 2017 full year figures upwards to reflect the stronger H1 performance. We now expect 4% growth y-o-y to 48.5bcm in 2017. Furthermore, whilst diversification away from gas-fired power generation will continue, the current gas power capacity will still be required to respond to fluctuations in alternative generation, particularly from the country's hydropower facilities.

Iran Compensation Improving Prices

Strongest H1 For 5 Years
Turkey Gas Consumption, bcm
Source: EPDK, JODI, BMI

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